Croatia's Krpan touts new bidding rounds as means to boost output

By Kurt Abraham, Editor-in-Chief, World Oil on 2/22/2019

HOUSTON -- During the recent North American Prospect Expo (NAPE) held in Houston, the president of the Croatian Hydrocarbon Agency (CHA), Marijan Krpan, visited with World Oil about the steps his government is taking, to improve the country’s oil and gas production. Key among these are two new licensing rounds, one to close in June 2019, and the other to finish in September 2019.

Looking at the history of licensing in Croatia, the country’s 1st Onshore Bidding Round was held between July 18, 2014, and Feb. 18, 2015. In that round, five of six exploration blocks on offer had licenses awarded, including four PSAs to Vermilion Zagreb Exploration Ltd. and one PSA to national operator Industrija nafte Plc (INA). Now, comes along the 2nd Onshore Bidding Round, which was opened on Nov. 2, 2018, and will close on June 28, 2019. The deadline for granting licenses is Oct. 31, 2019. The round consists of seven exploration blocks in the “remaining” part of the Pannonian basin, the primary producing region in Croatia. These blocks include Drava-03, Sava-06, Sava-07, Sava-11, Sava-12, Sjeverozapadna Hrvatska-01 and Sjeverozapadna Hrvatska-05 (see map). It should be noted that Drava-03 also was offered in the first round, but it did not attract a PSA.

“We have more than 10,000 km of 2D legacy seismic and nearly 1,800 km2 of 3D legacy seismic available in our data room,” said Krpan. “The total acreage on offer in this round is 14,000 km2. Keep in mind that a majority of our current, active fields are in the Pannonian basin, and most of our production is also there. In fact, more than 1 Bboe have been produced in this basin since World War II.”

And then, “we also announced the launching of our 3rd Onshore Bidding Round on Feb. 8,” continued Krpan. The round comprises four blocks in the Dinaridi area that runs along the border with Bosnia and Herzegovina, in the eastern portion of the southern half of Croatia.

“These four exploration blocks—Dinaridi 13, 14, 15 and 16—cover total acreage of 12,134 km2, added Krpan. “However, the problem here is a lack of data. We only have about 442 km of 2D legacy seismic available, and some 546 km2 of 3D legacy seismic. We would like to start off with the airborne collection of data over 12,000 km2.”

Krpan said that in the blocks of the 2nd Round, there are 37 unevaluated oil and gas shows. And in the 3rd Round blocks, 13 wildcats have been drilled, with eight of them registering oil and gas shows. “When you look at the total acreage, combined—14,000 km2 and 12,000 km2—this is the biggest offering in Europe right now, bigger than all the territory of Slovenia,” he exclaimed, with some neighborly pride.

“We’ve been here (NAPE) to try to find investors,” added Krpan. “The interest in the Pannonian basin is significant. We have had 11 companies look at the data room already, and we are quite sure that we will sell data packages to five or so of the 11.

“The main reason that we are putting on these bidding rounds is that production in our country is falling, and we need to do something significant about it,” explained Krpan. “We’re also looking at future prospects for LNG development.” In the last 20 years, he added, INA has been the only operator. And output is down to just 34,000 boed, of which oil comprises 17,000 to 21,000 bpd. “We are covering only one-fifth of our oil demand with domestic production, and only about 40% of gas demand,” added Krpan. “Five years ago, we were covering 80% of domestic oil demand.”

A larger, more complete version of this interview with CHA’s Marijan Krpan will appear in World Oil’s March 2019 issue.